Chicago Housing Market . Rosy Scenarios have Thorns
A few nights ago Jackson rewrote history in the magnificent manner that a five-year-old will, telling the story of how mommy and daddy fell in love on the beach.
While we have shared more than a few beach front holidays with sand beneath out feet, our initial meeting was a bit more urbane with the concrete of Chicago’s sidewalks beneath our feet. But as with any good tale, we will let Jackson spin his narrative, grateful that his drawings dwell within the realm of smiles, grins and optimism.
Speaking of optimism, he said as he steered The Real Estate Lounge Chicago’s ship of narrative state clumsily, yesterday’s job numbers are grounds for optimism. To some.
I will side with the optimists if but for a moment because the numbers track a steady two year increase, putting overall employment at its best level since 2008. Given the tendency of many Americans to lose sight of the yawning chasm where we were but two short years back this is no small achievement. Heck, the fact that the entire nation didn’t propel like a madly flying arrow into the heart of a Steinbeck novel, all migrating through dust patches for some unknown but yet desired westward utopia is nothing short of a miracle given the precipice where our national/global economy was but two years back.
So here we are, not quite celebrating the fact that Friday’s statistics reflect a sub double digit unemployment rate, but grateful that we are making progress. The next question is where is the overall housing market including the Chicago housing market?
If the mass of economic prognosticators are to be believed the housing market lags behind other positive economic indicators. And though this view is pessimistic, I side with this analysis. The question becomes to what extent is the lag. The only true deviation in the past year with respect to housing numbers occurred in correspondence with the extended federal tax credit related to home purchases. This program went to bed last July and in its aftermath there was an essential flat-lining of the housing market in Chicago and nationally. Not that all purchases that took place were stimulated by the credit, but some were and others simply swam in the same stream.
Purchases still occurred through the rest of the calendar year. But the fall off after July was profound. The next uptick was a flurry of activity that took place after the mid-term elections. November and December witnessed an increase of folks taking the purchase leap with propitious mortgage rates. While the amount of activity could not be considered prodigious, in comparison to the absence of activity for the prior half year, it seemed entirely robust.
Since entering 2011 we have experienced another drop in activity related to the sale of Chicago homes and condos. I would not classify it as a phenomenal drop, but there was a bit of a slow down with the turning of the new year. Perhaps “bit of a slow down” doesn’t truly suggest what we witnessed in January as additional voices lent volume to the idea that a double dip may be in the offing for the housing market.
True?
Part of the answer, I suggest, rests in the degree of impact rosier job numbers have at street level. For the past several weeks there have been statistics intimating an improved economic situation for the country. But I have been hard-pressed to see this being played out at an individual level. And the individual level is the impetus for what happens with respect to the housing market. If folks at the street level view experience true confidence then my bet is on the housing market stabilizing.
Bear in mind, however, that stabilization will predicate on levels akin in all likelihood to 2002 or so. This is true in Chicago and across the domestic map.
For my part, my buying clients look at the current Chicago real estate market as an opportunity market. We will act if we have an opportunity to make a good, reasonable deal. Bear in mind these aren’t usurious usurpers of another person’s failed or faltering American dream. Though in all likelihood the price we have in mind with respect to a specific property deviates from what the seller hopes to achieve. If the seller bought since 2002 it is very likely that he or she overpaid. That’s not a mistake that we will make.
Having said this, we can and do anticipate the same reception for the home and condos we have listed for sale. More than anything the current Chicago real estate market demands that when we list a home to sell we do so realistically. To not price a home realistically simply means we will sit on the shelf gathering dust, unsold.
Speaking of buying, selling, and participating in the current Chicago real estate market, don’t hesitate to contact Tom McCarey at 773.848.9241 to discuss inventory, your options and how current market metrics color what we can anticipate and determine our strategy.
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